April 2025 Market Memo

Market Overview, Analysis, and Outlook:

S&P 500 Index Performance:

• April Performance: -0.76%

• Year-to-Date (as of 4/30) Performance: -5.66%

Macro Environment

The market in April experienced a slight decline of less than 1%, but volatility was significant. Early in the month, the market saw a sharp sell-off, with a cumulative decline exceeding 10% over April 4th and 5th, followed by a strong rebound starting April 9th. The market faced not only uncertainties in fiscal policy but also disruptions from a flood of economic data. However, with the Trump administration’s pause on tariffs, generally positive recent economic data, gradually easing inflationary pressures, and robust corporate earnings—particularly from large-cap technology stocks—the impact of tariff policies on the market has diminished, allowing the market to gradually return to a normal rhythm.

That said, we must remain vigilant. The effects of policy and economic cycle disruptions have yet to fully manifest, and we must remain vigilant for signs of a potential recession. Until data confirms or a market consensus emerges, we will continue to execute trading strategies with edge while maintaining strict risk controls.

Risk Control

April presented the dual challenge of navigating significant risks stemming from policy uncertainty while capitalizing on opportunities arising from strong fundamentals of high-quality companies, solid economic data, and the Federal Reserve’s gradually easing policies. We successfully balanced risk management with opportunity capture.

U.S. Stock Market Outlook

We are cautiously optimistic about the market’s trajectory in May. First, the breadth and strength of the market’s reversal have been impressive. Second, market sentiment remains relatively pessimistic, with significant capital still on the sidelines, indicating that substantial buying power has yet to enter the market. Stock buybacks have reached historic highs in recent years, and potential tailwinds from proposed tax cuts and deregulatory policies further bolster our outlook. We will actively position ourselves to participate in the market.

Future Outlook and Strategy:

Our strategic focus will be on swing trading large-cap technology stocks and other high-momentum equities. While maintaining a conservative approach, we will actively engage in market opportunities, prioritizing cash reserves (“Cash is King”) and focusing on derivatives trading. The bond market presents significant opportunities, but we have yet to identify an optimal entry point. Should Treasury yields rise in May, we will increase our bond holdings.

Wei Cheng
CEO and Chief Investment Officer

Tranquil Tide Wealth

Written on April 30, 2025